Small-town Minnesota contractor or international fraud? Mayor resigns amid claims of hiding millions

KERKHOVEN, MINN. – Everyone in this prairie town two hours west of the Twin Cities knows Jim Rothers. He's a dreamer, a builder, a former Marine, a generous friend to his neighbors.

And until a few days ago, he was the mayor, too.

But only five months after he was elected, Rothers quit. He turned in his resignation this week after a raucous City Council meeting where he was lambasted by fellow council members for refusing to tear down a funky 54-foot concrete tower he built without a permit last year on the town's main drag.

While the tower kerfuffle has been the hot talk in town, Rothers has much bigger problems. A civil complaint filed in February in federal bankruptcy court accuses him of executing a wide-ranging fraud designed to hide millions of dollars from creditors of his bankrupt construction company, which builds grain silos throughout the region.

Court documents allege that Rothers moved assets to sham companies; set up a corporation in the Caribbean island of Nevis; bought over $1 million worth of precious metals; and fraudulently cashed hundreds of thousands of dollars' worth of checks written to other people.

Rothers' girlfriend, Stephanie Voxland, is accused of fraud in a separate federal case related to Rothers' bankruptcy. Court documents also accuse Rothers' Willmar attorney, Gregory R. Anderson, of fraudulent actions, though no case has been brought against him.

In Kerkhoven, where most everyone knows their neighbor, the controversies surrounding Rothers don't come as a complete surprise.

"I'll give him credit — he wants to try things," Almen said with a shrug. "It's just that when he has an idea, and he keeps on and on and on with it, and then it falls apart. ..."

Rothers, 51, is a former Marine who served during the first Gulf War. He wears a bracelet honoring Heinz Ahlmeyer Jr., a Marine who died in Vietnam. Friendly and talkative, Rothers has the beefy forearms and meaty hands of someone who's spent his life building things.

Describing himself as "half libertarian, half anarchist," he dismisses his troubles with the City Council as "a lot of small-town politics."

"I think the majority of the town supports me," he said. "There are maybe 90 or 100 people who don't. I just decided I've had enough fight, and it's time for me to move on with my life.

"My fourth-grade teacher taught me it takes two to tangle, so if I remove myself, then there's no more fight."

"He seemed like a go-getter; I liked his ideas," Thompson said. "He started off good; he attended every council meeting. Then there were some disagreements. He started missing some meetings and eventually he just quit."

Townspeople said that Rothers and his father, Jon, donated labor and materials to rebuild the city's swimming pool a few years ago, saving Kerkhoven about $40,000. Rothers also rebuilt a barn that burned down on a local dairy farm and never sent a bill, said Rich Radtke, who owns Prairies Edge Organic Dairy with his wife, Carol. The barn, which burned in 2013, cost more than $40,000 to rebuild, Radtke said.

"This is not the first time he's helped people," Radtke said, telling about a local family whose medical bills Rothers paid when the mother had cancer. "He gives too much away — I've spoken to him about that.

"He told me his philosophy once: 'It's not my money — I only rent it.' "

It seems difficult to square those descriptions with the schemer portrayed in court files, a man who allegedly engineered an international fraud with the help of his lawyer and his girlfriend. Both Anderson and Voxland have hired attorneys to represent them.

"I firmly believe the truth will work itself out in the end. I spend two hours with the [bankruptcy] trustee and all of a sudden I'm Denny Hecker," he said, referring to the Twin Cities auto dealer sent to prison in 2010 for defrauding lenders of $31 million and falsifying loan and bankruptcy records.

Rothers and Voxland share a home in an abandoned auto-body shop behind his tower, across the street from his ex-wife. Modest on the outside, the building's interior would fit right in among the pricey lofts of the North Loop in Minneapolis. It's all reclaimed wood, industrial metal and stone, built with Rothers' own hands.

But they'll have to move out. The building is zoned commercial, not residential, and the city recently served them with an eviction notice. Rothers said the pair plans to leave Kerkhoven — maybe for Wisconsin, maybe for South Dakota, maybe for the North Woods.

The city wants Rothers to tear down the tower, too. Rothers said he built it to test a new concrete-form system for his business, but added his own Frank Lloyd Wright-inspired touches to the design: "If you're going to build it, why not make it cool?" he said.

In his last council meeting as mayor, fellow members — and others in the room — reminded him that he had promised to take down the tower, and they pressed him on the timeline.

They even quarreled over Rothers' mayoral pay of $200 a month. Council Member Scott Lamecker reminded Rothers that in his campaign, he'd promised not to take a paycheck.

"And you have drawn pay," said Lamecker, whose son is married to Rothers' daughter.

"I'm not a perfect person," Rothers said, signing his resignation letter as the city clerk hovered over him waiting for it. "The truth always lies somewhere in the middle."

John Reinan • 612-673-7402